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Wednesday, March 16, 2011

Are publishers who raised e-book pricing the past year losing the ebook-pricing war? I'd like to think so.

The blog article's subject title is from the headline on the article by Philip Jones at Futurebook.net commenting on the higher-priced e-books not appearing very much in Amazon's topmost besteller lists (UK).

Actually, he's commenting on The Guardian's article by Sam Jordison on "EU anger over ebook deal suggests hard times ahead for publishers."

Describing again (1) the circumstances leading to the use of Apple's "Agency Plan" by the Big5 (and now Big6) publishers, which raised e-book prices by 30-50% average, this last year, and (2) the raids by the European Commission on publishing houses in the UK to investigate possible anti-trust violations, seizing not only paperwork but also "smart phones and laptops from senior executives," the Guardian's Jordison sides with the publishers against what he describes as a monopolist Amazon against angelic publishers who are just trying "to get a good deal for everyone."

They do, however, have the sense to see a valid point in the complaint "The only reality we readers know is that we want to buy the book but can't."

They continue, nevertheless, "But the fact that customers have a distorted view of how much ebooks should cost is hardly the publishers' fault. Especially since a new breed of "self-published" authors are starting to sell millions of the things at $0.99 or less on Amazon – which casts an interesting light on the recent declarations about ebooks outselling paper books."

Imagine that! But then, new technology has been a problem through the ages for those wedded to older technology and unwilling to adjust to it.

Futurebook's article
Philip Jones thinks that Sam Jordison is an advocate of publishers setting of bookseller prices "but he is concerned that publishers may lose the battle legally, and that they have already lost the battle in the hearts of the consumers."

Yes, and Jordison might do a bit more wondering about why that is so, and it's not just about pricing. It also says a lot about what publishers think of their reading customers. I've seen publisher statements (and reprinted them) that anyone well-off enough to buy an e-reader can afford the high book prices. (Thanks to Joe Besser for the correction.)

In marking books up by almost 50% when new, and also OVER the price of their paper back copies too often, they display a real disdain for e-book customers who are expected to spend almost as much OR MORE on a product that cannot be resold, and in most cases still cannot be lent to anyone.

This goes against the traditional attitude toward books. The publishers prohibit, for the most part, lending as is normal with paper books, and prohibit entirely re-selling the books. Yet they price them higher than paperback books, and often only a few dollars less than a hardcover. And now they're targeting libraries, with e-books to be disabled after x number of loans. And the latter is with publishers willing to lend e-books at all to public libraries. Macmillian and Simon & Schuster won't. Jones points out:

'... publishers such as Hachette, Harper, Penguin, and Simon & Schuster, should be getting their titles into the Kindle charts, even at higher prices. But I just checked the hourly Kindle chart, and there are no agency priced books in the top 20. The highest placed title is David Nicholls' One Day (Hodder/Hachette), which also happens to be the fourth most expensive Kindle Edition in the current top 50.

Furthermore, and this is even more worrying. The average price of paid-for books in Amazon's Kindle top 50 chart today is £1.79. It is little wonder Guardian commentators [people commenting on the article] think e-books should cost less than agency publishers are making them available: they do.

Read some of the reviews appended to those self-published titles in the Kindle chart, and we could be forgiven for thinking that price has superceded quality in the minds of Kindle users. This is not just worrying it is tragic. Agency publishers have a limited period of time to prove Amazon wrong by getting their titles up the Kindle bestseller chart, before the OFT rules one way or another. The concern must be that by then, the war may already have been lost. '

His numbers are from the Amazon UK Kindle store, but in the U.S. the UK site's Kindle book pricing is not displayed except in the Bestseller listings.

Actually, there ARE e-reader customers who give cost a very high weight in the economy we're in today. Many are also finding quality writing although they may have to dig deep and wide, but when they find it, word of mouth is a huge factor in online book sales.

The online community is important for those not wanting to wade through it all, and there is actually a way to find quality writing without depending on large publishing houses and publicity machines, to the extent that some writers discovered by price-conscious readers have been offered contracts by large publishing houses; an important trend now is seen in authors who are hesitating to go with the contracts offered, as it may be more beneficial for them to continue to 'self-publish' because the large publishers have not had a reputation for paying the authors/creators what they are due.

For the Amazon UK customers' rather raw feelings on all this (and publishers should really pay more attention to what is said), see the Agency pricing thread on their Kindle forums. It's similar to what is seen on the U.S. forums but UK customers are even more angry about it because the increases by the Big5 publishers have been quite outrageous in the UK where general e-book pricing had been lower than it had been Amazon US's Kindlestore.

BESTSELLER E-BOOK listings for UK and US stores
Here is the current Bestseller listing (paid and free) for Amazon UK,
and here's the current Bestseller listing for for Amazon US.

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When Jones writes "read some of the reviews appended to those self-published titles in the Kindle chart, and we could be forgiven for thinking that price has superceded quality in the minds of Kindle users," his disdain for the people who self-publish and their readers is pretty obvious.

I've only recently gotten into the .99 novels at Amazon (I'm not much of a fiction reader) and I can't recall any review that gave me that impression. Saying that "this is a great read and I can't believe the low price" isn't the same as saying price is more important than quality.

Calm down. Journalists often turn stories into horse races with winners and losers. "Have publishers already lost the war over agency pricing?" is that sort of headline. LIfe's a bit more complex than that.

First, executives of at large publishers get their jobs because they've made few or no mistakes in their careers. That makes them risk aversive. Ebooks are new and how they're priced is a major risk, hence their efforts to control prices and to sell them as close to print prices as possible. That doesn't mean their attitudes won't change if sales say otherwise, nor does it make any other final result other than what they are doing now is a 'loss' for them. If pricing low and going for quantity works, they'll join the bandwagon. After all, they know, far better than any independent author, how to hype a book.

It also seems likely that the big five (now six) publishers have won with agency pricing, particularly in the U.S. Smashwords, for instance, is insisting on it for their independent authors. If they've won, if Amazon can't create a near monopoly on ebook sales by selling below cost for a time, how have the publisher's lost? They got what they wanted. Amazon didn't. Game over.

Nor would I make much of the EU raids on publishers and the seizing of laptops and smartphones. That's the sort of showboating that impresses journalists, but those who're more observant know that actions like that suggest that EU bureaucrats have little or no evidence of wrong doing. Those moves are more an indication of desperation.

Finally, I think we're forgetting another factor. It came to me after a friend told me she liked Blue Like Jazz. I loathed the book, seeing it as a badly written journey into self-obsession. (Notice how often the author uses first-person pronouns.) Since then I've noticed that sometimes dreadfully written books become bestsellers, Sieg Larsson's novels being a good example. G. K. Chesterton commented on that when he defended penny dreadfuls for boys a century ago. They like them, he said, because they like a certain kind of story, even if the language is stilted.

Don't get me wrong. I don't think these books succeed because they're badly written. I just think there's something about them that overrides their awfulness. Blue Like Jazz appeals to some because the author elevates his feelings to the most important thing in the universe, something many of his readers also do.

I'm not sure why Larsson is so popular, but it's certainly not the author's grasp on reality. When I read an excerpt, I felt like hurling my Kindle against the wall. He had someone dock a boat like parking a car, probably a good indication just how little he knew about boats. This person even dropped an anchor at the dock, much like people in cars put on their parking break. As a former sailor, I wanted to scream.

There's a sense in which traditional publishers have been shielding us from this appealing trash, either by not publishing it or by editing the heck out of it. That barrier is now gone, and we're in for stormy waters as fans by the millions gush over 99 cent books that the critics blast--much like they once did penny dreadfuls. And when that happens, it makes no sense to call those occasional successes proof that big publishers 'don't get it,' or that 99-cent pricing by independent authors is the wave of the future.

I'm an illustration. I published a 99-cent ebook edition of William Morris excellent tale, The House of the Wolfings, pointing out its many links to Tolkien's later Lord of the Rings. It's a great story and the Tolkien link can't hurt. Morris was an excellent writer, so it's well-written. But it's the sort of tale that was popular a century ago, when the adventures of Germanic tribes were almost as hot as vampire stories are today. Unfortunately for me, it strikes few modern chords and earns me about $25/month.

The other thing that Jones and company miss is that the embrace of the $1-3 novel was in response to the Agency 5-now-6 imposing a substantial price increase in the midst of a recession no less! When you could count on bestsellers being $9.99 or less, the top-selling books at Amazon came from the big publishers. It was their greed that provided the impetus for people to consider the $1-3 e-books.

Would prices have dropped anyway? Sure but their tactics moved the market to collectively give the less-expensive indies a serious look and caused the price people are willing to pay for popular and genre fiction to collapse.

Publishers are loosing because just as with newspapers & news, britannica & enclopeadic summaries, record companies & music, the internet breaks the control publishers have over books. If Amazon did not build the Kindle e-publishing would have grown organically as convenient reading devices (ipads & smart phones) became common. Amazon's smarts was in anticipating the inevitable.

Without control of all books agency pricing become futile as people substitute an equivalent cheeper book for the agency book. This sucks the oxygen out of the agency publishers ebook sales. As ebook sales grows as a proportion of all sales this has to have a negative impact on the agency publishers profits.

The agency model guarantee hight profits to Amazon for each books sold under it, Amazon seems to have used those profits to drop kindle prices & aggressively develop kindle apps for any device that can take one. In other words to defends its near monopoly.

Stig Larsson is traditionally published & priced, there are even print editions,if his work is trash then traditional publishers are not shielding the reader from trash.

It might be worth mentioning that the UK has a tax problem with regards to ebooks. Paper books are exempt from VAT, which allows them to keep their prices low. Ebooks are not exempt. In the UK physical book production costs (printing, binding etc) are roughly 10-12% of the cover price, which obviously is not an issue with the ebook, but the ebook has 20% VAT slapped on top which the physical book doesn't. Hence the ludicrous situation in the UK where ebooks cost more than paperbacks.

Since the Guardian article mentions this as being quite an important facet of the issue, it might be worth noting it here.

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